CCR says law increasing pensions by 40pc is constitutional

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The Constitutional Court of Romania (CCR) has rejected on Wednesday the Government’s referral on the pension rise, stating that the law increasing the pension point by 40 percent is constitutional.

The move comes as the Government is preparing a new draft budget for 2021, so the chances of a 40pc rise of the pensions are low. An increase by 14pc of the pension is already in force, so the new majority in Parliament is expected to cancel the 40pc increase and to maintain the rise of 14pc established by the former Liberal Cabinet last year.

The law on the 40pc increase will be sent for promulgation though, according to the procedure, with the President expected to send the law back in Parliament for re-examination.

The Government has referred CCR in October 2020 over the budget rectification that stipulated the increase of the pensions in Romania by 40%.

The Orban Cabinet argued that the Parliament “had ignored the predictability requirements of the law and the perspectives of the evolution of the consolidate budget situation and of the general economy, and might affect the principle of the judiciary security”.

The Parliament, with PSD holding the majority, voted for this 40pc increase of the pensions on September 22, 2020, with an amendment filed by the Social Democrats to the budget rectification bill.

The new Labour minister Raluca Turcan said today after the CCR’s ruling that the financial impact of such an increase would mount to RON 138 billion, which is not sustainable, and that it is the Parliament that is to decide on the further steps.

On the other hand, the Labour minister said that there are currently 900,000 pensioners in Romania who received RON 800 as a monthly pension, arguing that the Government has the moral and professional duty to find answers to these existing anomalies.

Turcan added that there also 9,000 beneficiaries of some “disproportionate pensions”, except for the military pensions. “In Romania there are monthly pensions of RON 18,000, RON 41,000 or RON 50,000. The highest pension mounts to RON 78,634, out of which only RON 5,205 is based on contribution to the state, the rest of RON 73,429 comes from favoring criteria obtained from several laws”, according to the Labour ministry.

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